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How Minnesota became the 'poster child' for Trump's crackdown on social services fraud

Eva Herscowitz, The Minnesota Star Tribune on

Published in News & Features

MINNEAPOLIS — The Trump administration is waging what it calls a war on fraud across the country, but the executive order creating a task force to curb “widespread” abuse in benefits programs singles out one state: Minnesota.

“The staggering fraud and waste in Minnesota alone is a case in point,” President Donald Trump wrote in the March directive, pointing to the Feeding Our Future scandal and the alleged mismanagement of food stamp spending as justification for federal officials to probe fraud in other states — from California and Illinois to New York and Maine.

The scrutiny has already started. Federal leaders sent letters to a string of states, most with Democratic governors, asking for information intended to reveal program irregularities months after they began examining Minnesota social services.

The requests to each state differ, but the situation reflects how Minnesota has become a “poster child” for the federal government’s aggressive approach to rooting out fraud, said Andy Schneider, a Georgetown University professor who served as a senior adviser at the Centers for Medicare and Medicaid Services (CMS) during the Obama administration.

“It certainly looks like the current attacks on state Medicaid programs started with Minnesota, and we don’t know where they’re going,” Schneider said.

It’s another example of Minnesota drawing the ire of the Trump administration, and national attention, for everything from ICE protests to its outspoken Democrats.

Earlier this year, the Trump administration took the unprecedented step of threatening to withhold billions in Medicaid funding to Minnesota.

CMS Administrator Mehmet Oz recently approved a plan the state had to submit to improve oversight of social services, defusing the threat for now — but not before the White House widened its anti-fraud efforts from Minnesota to states across the country.

The center, as well as a U.S. House of Representatives committee, recently sent a flurry of letters to over a dozen states.

Peppering governors with a raft of questions about social services oversight, the letters cited apparent issues in each state: Tens of millions in improper payments in a Maine autism treatment program. Staggering growth over the last 10 years in social services expenditures in California. A similar trend in New York, where programs that have gained attention in Minnesota for attracting fraudsters have ballooned, including medical transit and adult day care.

Alice Burns of KFF, a health policy research group, said two themes distinguish the Trump administration’s crackdown on fraud across the country from similar pushes in the past. For one, the scope of federal dollars at risk is significant — billions in withheld Medicaid payments to Minnesota could upend the lives of millions of people.

Also new is the federal government’s focus on potential wrongdoing, rather than identified fraud.

 

In the past, “we haven’t seen the federal government withhold or defer funding when fraud is suspected but not yet proven,” said Burns, an associate director of Medicaid and the uninsured.

The letters, she added, “seemed to imply that things sort of similar to what happened in Minnesota could happen in those states if the state response to the letter was not deemed sufficient by CMS.”

Trump devoted a portion of his February State of the Union address to calling out “corruption” in Minnesota, saying that some members of the Somali community “pillaged” billions from programs before asserting California and Maine face similar fraud issues. (Many of those charged in Minnesota’s Feeding Our Future case have been of East African descent.)

The moment illustrated how fraud has grown from a thorny issue in Minnesota to one with political implications across the country, with the past few months providing a preview for events in other states.

Even the scope of the fraud in Minnesota has become politicized. An exodus of lawyers from the state U.S. Attorney’s Office over displeasure with Trump’s immigration actions undermined investigations into people suspected of bilking state Medicaid programs. Before that, former federal prosecutor Joe Thompson estimated $9 billion was stolen from services meant to help Minnesotans in need.

Gov. Tim Walz has called that figure “speculation,” while a Minnesota Star Tribune’s review of federal court cases showed alleged fraud uncovered to date is closer to $218 million, though that number is expected to grow as ongoing state and federal investigations into the state programs continue.

In Massachusetts, GOP candidates are pointing to alleged fraud that unfolded on Democrats’ watch as a reason to vote for Republicans in the midterms, as Republicans in Minnesota have also seized on the fraud message. And like in Minnesota, attorneys general have filed a bevy of lawsuits against the Trump administration to thwart its actions, as states under the spotlight contend with the specter of federal officials withholding Medicaid funding.

Echoing some local Democratic politicians, Maine Gov. Janet Mills accused Trump of using fraud as a “political cudgel” to “distract from his failing agenda.” A Maine Republican running for Congress sounded much like some GOP candidates in Minnesota when he made fraud a focal point of his campaign.

Lawmakers aren’t just tussling over allegations. Other states are also looking to Minnesota for how to improve fraud detection, despite the scrutiny the state has gotten. A state Department of Human Services spokesperson said the agency works with other states to “discuss program integrity work and the assertive steps we’ve taken to fight fraud.”

Allie Gardner, a senior policy analyst at the Center on Budget and Policy Priorities, said the federal government’s swift threat to withhold Medicaid funding in Minnesota distinguishes the state from others. But the focus on a flurry of states has something in common.

“It’s really concerning that the long-standing partnership to work collaboratively [between] the state and federal government to identify and address fraud is really being upended,” Gardner said. “Historically, those efforts had been undertaken in a way to hold beneficiaries harmless, to address fraud in a way that did not hurt the people in the program.”


©2026 The Minnesota Star Tribune. Visit at startribune.com. Distributed by Tribune Content Agency, LLC.

 

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